Living with different crises, Argentina and Chile resort to Bitcoin for economic protection

The economic crisis in Argentina and the political crisis in Chile lead the population to seek economic protection options.

Living with different crises, Argentina and Chile resort to Bitcoin for economic protection

Opinion Two of South America’s most important countries are experiencing serious crises this year and seem to be turning to Bitcoin for economic protection: Argentina and Chile.

Our two neighboring countries live in different scenarios, but they leave no room for doubt, they live in crisis: Chile has been going through an economic and social crisis for over a year and has now culminated in the approval of a plebiscite to overthrow the constitution, which was the legacy of the dictator Augusto Pinochet’s period. Argentina is experiencing the serious consequences of three years of recession aggravated by the pandemic, dragging along with it the „eternal“ exchange crisis, with increased inflation, a surge in the dollar and increased poverty.

Chainalysis points out that the biggest blows with Bitcoin in Latin America are from Brazil

Macri’s failure and miserable growing with Fernández

The economic policies of neoliberal Mauricio Macri, who promised „zero poverty,“ domination of inflation and foreign investment, in the words of the former president himself, have failed. He delivered the country with extreme poverty indices (38% of the population, 8% in miserable conditions), explosion of inflation and devaluation of almost 40% of a currency that was already fragile and scarce foreign investment.

The neoliberal failure lit the kirchnerist flame in the country, which had been extinguished, and led to the election of Alberto Fernandez last year. With the arrival of the pandemic, Argentina made a lockdown that was relatively successful in public health, but it was an economic and social failure.

Almost seven months after the quarantine, Argentina is poorer and more unequal, there was a lack of essential products, inflation skyrocketed and the government now intervened in the possibilities of economic protection of the population itself, limiting the purchase of dollars to $ 200 per person and with tax of 35% on purchases in credit and debit cards using dollars.

The situation is so serious that banks and citizens are already trading in dollars, replacing the peso and generating a heated clandestine market. As a result, the country’s foreign exchange reserves melted to a mere $37 billion, almost 10% of that of neighboring continental Brazil.

Former World Bank director Otaviano Canuto tried to explain the Argentine crisis to the government360:

„The restriction measures in place were already harsh, and the government tightened them further, hitting individuals and companies, going far beyond the ‚invading‘ foreign investors. In the case of companies, the government is trying to force them to restructure their foreign debts“.

The scenario seems to boost the market for cryptomoeda. Coindance data on the P2P LocalBitcoins exchange prove this thesis. The exchange registered its highest trading volume in Argentina in June 2020, with more than US$ 125 million traded for two weeks in a row.

The country, which already has in the culture of the population the habit of saving dollars for economic protection since the 1990s, now also resorts to cryptomoedas in these cases. With the worsening of the COVID-19 indexes in the last two weeks and a series of protests in the country, the fear of the population has also become Bitcoin.

Trading at LocalBitcoins was less than $70 million in early October, before the government announced more interventionist measures to buy dollars, to more than $90 million last week, a significant 23% increase in days weeks in the volume traded at BTC.
In Chile, the violence of the political crisis and the end of the Pinochet constitution

Argentina’s neighbor in the Pacific Ocean, Chile, is experiencing a violent political upheaval that began in October 2019 and did not even cool down during the pandemic. The liberal government of Salvador Piñera had a small victory in proposing a plebiscite last week, overthrowing the ultraliberal constituent inherited by the Augusto Pinochet dictatorship, one of the most bloodthirsty and perverse on the continent.

Argentina’s neighbor in the Pacific Ocean, Chile, is experiencing a violent political upheaval that began in October 2019 and did not even cool down during the pandemic. The liberal government of Salvador Piñera had a small victory in proposing a plebiscite last week, overthrowing the ultraliberal constituent inherited by the Augusto Pinochet dictatorship, one of the most bloodthirsty and perverse on the continent.

From October 2019 until today, politics dominates the debates in Chile.

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